Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Forest Laboratories has an F-score of 6 indicating the company's financial situation is typical for a stable company.
The historical rank and industry rank for Forest Laboratories's Piotroski F-Score or its related term are showing as below:
FRA:FQX'
s Piotroski F-Score Range Over the Past 10 Years
Min: 2 Med: 6 Max: 8
Current: 6
During the past 13 years, the highest Piotroski F-Score of Forest Laboratories was 8. The lowest was 2. And the median was 6.
Forest Laboratories Piotroski F-Score Historical Data
The historical data trend for Forest Laboratories's Piotroski F-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Forest Laboratories's Piotroski F-Score
For the Drug Manufacturers - Specialty & Generic subindustry, Forest Laboratories's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Forest Laboratories's Piotroski F-Score Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Forest Laboratories's Piotroski F-Score distribution charts can be found below:
* The bar in red indicates where Forest Laboratories's Piotroski F-Score falls into.
How is the Piotroski F-Score calculated?
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.
Profitability
Question 1. Return on Assets (ROA)
Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.
Score 1 if positive, 0 if negative.
Forest Laboratories's current Net Income (TTM) was 122.
==> Positive ==> Score 1.
Question 2. Cash Flow Return on Assets (CFROA)
Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.
Forest Laboratories's return on assets of this year was 0.0207486. Forest Laboratories's return on assets of last year was -0.00384077.
==> This year is higher. ==> Score 1.
Question 4. Quality of Earnings (Accrual)
Compare Cash flow return on assets (2) to return on assets (1)
Forest Laboratories's gearing of this year was 0.33118385. Forest Laboratories's gearing of last year was 0.
==> Last year is lower than this year ==> Score 0.
Question 6. Change in Working Capital (Liquidity)
Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.
Score 1 if this year's current ratio is higher, 0 if it's lower
Forest Laboratories's current ratio of this year was 2.72972513. Forest Laboratories's current ratio of last year was 2.95461019.
==> Last year's current ratio is higher ==> Score 0.
Question 7. Change in Shares in Issue
Compare the number of shares in issue this year, to the number in issue last year.
Score 0 if there is larger number of shares in issue this year, 1 otherwise.
Forest Laboratories's number of shares in issue this year was 279.292. Forest Laboratories's number of shares in issue last year was 266.327.
==> There is larger number of shares in issue this year. ==> Score 0.
Efficiency
Question 8. Change in Gross Margin
Compare this year's gross margin (Gross Profit divided by sales) to last year's.
Score 1 if this year's gross margin is higher, 0 if it's lower.
Forest Laboratories's gross margin of this year was 0.79234187. Forest Laboratories's gross margin of last year was 0.79147931.
==> This year's gross margin is higher. ==> Score 1.
Question 9. Change in asset turnover
Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.
Score 1 if this year's asset turnover ratio is higher, 0 if it's lower
Forest Laboratories's asset turnover of this year was 0.45874788. Forest Laboratories's asset turnover of last year was 0.42649648.
==> This year's asset turnover is higher. ==> Score 1.
Evaluation
Piotroski F-Score
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6
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Forest Laboratories has an F-score of 6 indicating the company's financial situation is typical for a stable company.
The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.
He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.
He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.
What he found was something that exceeded his most optimistic expectations.
Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.
Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).
Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.
Forest Laboratories Piotroski F-Score Related Terms
Thank you for viewing the detailed overview of Forest Laboratories's Piotroski F-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Forest Laboratories (FRA:FQX) Business Description
Forest Laboratories, Inc. is a Delaware corporation organized in 1956. The Company develops, manufactures and sells branded forms of ethical drug products most of which require a physician's prescription. The Company's most important United States products are marketed directly, or 'detailed,' to physicians by its salesforces. It emphasizes detailing to physicians of those branded ethical drugs which have the most potential for growth and benefit to patients. The Company also develops and introduces new products, including products developed in collaboration with licensing partners. The Company's products include those developed by it and those acquired from other pharmaceutical companies and integrated into its marketing and distribution systems. It actively promotes in the United States those branded products which have the most potential for growth and patient benefit, and which enable its salesforces to concentrate on groups of physicians who are high prescribers of its products. Such products include: Lexapro, its SSRI for the treatment of major depression in adults and adolescents and GAD in adults; Namenda, its NMDA antagonist for the treatment of moderate and severe Alzheimer's disease; Bystolic, its beta-blocker for the treatment of hypertension; and Savella, its newest product, an SNRI for the management of fibromyalgia. The Company's United Kingdom and Ireland subsidiaries sell both ethical products and over-the-counter preparations. Their most important products include Sudocrem, a topical preparation for the treatment of diaper rash; Colomycin, an antibiotic used in the treatment of cystic fibrosis; Infacol, used to treat infant colic; and Exorex, used in the treatment of eczema and psoriasis. The pharmaceutical industry is subject to comprehensive government regulation which substantially increases the difficulty and cost incurred in obtaining the approval to market newly proposed drug products and maintaining the approval to market existing drugs.
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